New Federal Ethics Rules
This Law Review was written by
Timothy A. French and edited by
Jed Mandel, both founding members of Chicago Law Partners,
LLC. CLP serves as Association
Forum’s general counsel.
Q:How do the new federal ethics rules impact my
association?
A:On January 1, 2017, the U.S. Of- fice of Government
Ethics (OGE) adopted amended
regulations governing the gifts
that federal employees may
receive from representatives
of a regulated industry. Those
regulations cover numerous interactions with agency employees, including their attendance
at association conferences and
meetings.
The revised regulations
prohibit a federal employee
from soliciting or accepting
any “gift from a prohibited
source." Conference hosts
may only provide items that do
not fall within the definition
of “gift” or meet a regulatory
exception. A “gift” is broadly
defined under the OGE regulations to include any gratuity,
favor, discount, entertainment, hospitality, loan or other
item of monetary value. The
regulations expressly state
that a “gift” does not include
“modest items of food and
non-alcoholic refreshments,
such as soft drinks, coffee and
donuts,” nor does it include
“items with little intrinsic
value, such as plaques, certificates and trophies, which are
intended primarily for presentation.” Also, free attendance
at a sponsor’s (association’s)
event is not a “gift” for a government agency employee who
will be presenting information
on behalf of the agency, or who
“is deemed to be essential” in
assisting in the presentation of
agency information.
A “prohibited source” is
any person who (i) seeks of-
ficial action from the federal
employee’s agency; (ii) does
business with the federal em-
ployee’s agency; (iii) conducts
activities regulated by the
federal employee’s agency;
(iv) has interests that may be
substantially impacted by the
federal employee’s duties;
or (v) is an organization a
majority of whose members
are described by the other four
categories listed above. As a
result, an association is likely
to be deemed a “prohibited
source” for purposes of the
OGE regulations when it invites
a federal employee to an event.
Like most federal regula-
tions, the details matter. For
example, while “gifts” do
not include free attendance
at a sponsor’s event, they
do include certain collateral
expenses, e.g., travel, lodging,
and entertainment, as well
as meals (other than those
provided in a group setting,
with all other attendees) unless
the employee is a presenter at
the event and is “invited to a
separate meal for participating
presenters that is hosted by the
sponsor of the event.”
A key exception to the
prohibition allows federal
agency employees to “accept
unsolicited gifts having an
aggregate market value of $20
or less per source per occasion,
provided that the aggregate
market value of individual gifts
received from any one person
does not exceed $50 in a
calendar year.” Although OGE
acknowledged that “$20 may
not buy the sort of lunch that
it bought in 1992 when the
regulation was issued,” it spe-
cifically elected not to raise the
cap on the blanket de minimus
exception.
The regulations also create
an exception for free attendance at “widely attended
gatherings” (WAGs). More
specifically, “when authorized
in writing” by an agency, an
agency employee may accept
free attendance to a WAG,
regardless of whether the
agency employee is a presenter
at the meeting. A gathering is
deemed to be a WAG if a large
number of attendees are expected, persons with a diversity
of interests will be present,
the meeting will be open to
members from throughout the
relevant industry or profession,
and there will be an opportunity to exchange ideas and views.
Interestingly, the regulations allow agency employees to accept awards for
meritorious public service or
achievement, including cash
payments, if (i) the person or
organization issuing the award
does not have “interests that
may be substantially affected
by the performance or nonperformance of the employee’s
official duties;” and (ii) an
agency ethics official has made
a written determination that
any award in excess of $200
(not including free attendance
at the awards ceremony for the
employee and his or her family) is part of an established
program of recognition. In
practice, however, the circumstances under which associations can grant such awards
are limited. For example, an
association cannot bestow an
award on a government employee if the employee could
substantially affect the interests of association members.
In light of the foregoing, a
number of specific guidelines
can be distilled:
1. Associations may offer
agency employees invited
to speak at their events free
registration and free meals,
as long as the meals are
provided in a group setting,
with other attendees.
2. Associations may provide
agency employees with free
non-alcoholic refreshments,
such as soda, coffee and
snacks.
3. It may be prudent to have
a cash bar at association
events where alcohol is
served and agency employees are in attendance.
4. Associations may provide
agency employees with
meals having a value of
$20 or less, including the
cost of any alcoholic beverages served.
5. With advanced written authorization, federal agency
employees can attend an
association’s WAGs for free
and can accept meals having a value less than $20
(and an aggregate value
less than $50), even if they
are not presenting at the
WAG. However, because advanced authorization from
the agency is required,
associations should ensure
that invitations to agency
employees to attend WAGs
are sent with sufficient lead
time.
6. Associations may present
plaques and certificates to
agency employees and may
confer honorary awards if
the awards are part of an
established program of
recognition.
The answers provided here should
not be construed as legal advice or
a legal opinion. Consult a lawyer
concerning your specific situation or
legal questions.
